How Many Automation Devices Are Available for the Industrial Internet of Things?

The Industrial Internet of Things (IIoT) and its potential to transform production operations is one of the hottest current topics in manufacturing.  Along with Industrie 4.0, IT/OT convergence, and Smart Manufacturing, the IIoT is cited as the latest means for making manufacturing production more flexible, more cost effective, and more responsive to changes in market demand.  Not surprisingly, numerous market forecasts attempt to quantify the potential inherent in the IIoT, promising that billions of "things" or devices, worth trillions of dollars, will soon be connected.

ARC has been in the business of market forecasting for some 30 years now, but we opted to pursue a different approach to sizing and forecasting IIoT potential.  Our approach focuses on assessing the Total Available Market (TAM) and looking at how many industrial automation devices are and will be available for incorporation into the IIoT.

This focus on connectable devices allows us to ground our assessments in our large database of primary research, a database that covers the range of process automation, discrete automation, and network infrastructure devices used to automate virtually all types of industrial machinery and processes.  Focused specifically on connected devices used in manufacturing production, our analysis excludes connected end devices such as automobiles, jet engines, or television sets.

While we expected this approach to yield more conservative figures, the results generate a total available market of over 200 million devices worth over US$280 billion by 2019.  These large figures were generated in spite of the relatively short five year forecast time frame, plus the inherently slow rate of change in industrial automation.  Industrial manufacturers have already accepted the value proposition inherent in connected devices, so the potential to take the next step and connect these devices to the IIoT is evident.  Retrofits of installed equipment as well as annual shipments of connected devices will both have a significant impact.

Further blog posts will delve into the issues of the prospects in discrete vs. process automation, the role of retrofits, and other results from our research.  Readers interested in the report in its entirety are encouraged to visit our web page.